A family affair

Extraordinary price growth in a range of up-and-coming suburbs in Melbourne's east has been attributed to Chinese families' focus on desirable homes near prestige schools. And some are pushing up values by knocking down existing homes to build grand new ones.

Figures from the Real Estate Institute of Victoria show 45.8 per cent growth in Balwyn; 22.2 per cent growth in Balwyn North and 23 per cent growth for Mount Waverley in the past year.

LJ Hooker Glen Waverley agent Joseph Ngo said his agency had made 35 sales totalling more than $20 million in the past six months, with 90 per cent of his clientele Chinese. Sixty per cent of those sales were to overseas Chinese investors, he said, with 30 per cent local Chinese-born buyers.

Joe Tan and Elsie Lua, who brought a house in Glen Waverley's school zone. Photo: Joe Armao.

“They're buying a lot of the properties unconditional - $100,000 to $200,000 over market price is not a problem for these buyers,” he said.

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Joe Tan, who is of Chinese-Malaysian descent and migrated to Australia eight years to study engineering, has just paid $1,255,000 for a three-bedroom home in Lincoln Avenue in Glen Waverley,

Now a property developer, he and his fiance Elsie fought off several other Chinese-born buyers to purchase the home because it fell in the catchment area for the prestigious Glen Waverley Secondary College.

L1/20 Ranfurlie Drive.

"I was looking at Balwyn as well but Balwyn was pricier and Glen Waverley was right on my budget," Mr Tan said.

The REIV figures show Glen Waverley has grown 10.1 per cent in the past year.

“Looking at the house prices nowadays, I thought if I'm able to, why not just secure a property rather than waiting for another few years when I already have kids,” Mr Tan said.

Proximity to good schools was also part of the appeal at a Glen Waverley auction last Saturday.

Before a crowd of about 60, in which Ming Xu from Biggin & Scott repeated negotiations in Mandarin, Lisha Ma and her family bought a new four-bedroom townhouse at 1/20 Ranfurlie Drive for $929,500. Agents had been quoting between $850,000 and $900,000.

Ms Ma admitted she paid a premium for the convenience of having prestigious schools nearby.

“There are good schools in Glen Waverley, primary and secondary, so that will benefit my kids down the track,” she said.

And she loved the location so much that in post-auction negotiations, she bought the block next door - also owned by the vendors - for $450,000 so that she could build a townhouse next door for her parents. "We will be able to help each other,” Ms Ma said.

Kew, Canterbury and North Balwyn are also on the radar for Chinese families who look to purchase in areas that boast prestigious state and private schools.

According to Juwai.com, a Chinese international property website that attracts 1.5 million unique visitors a month, 41 per cent of Chinese property buyers who made an inquiry in July identified education as their prime motivation for purchase.

Kandy Xu and her husband also purchased with their children's education in mind. The family migrated from Shanghai to Australia four years ago, pouring the profits from their small family business into property.

While the family is currently renting, they have recently bought a two-bedroom apartment in Ebony Camberwell, an off-the-plan development, for just under $600,000, and hope to move in next year.

“Our older daughter has graduated from Balwyn High School so we can leave Balwyn North now, but we have a younger son, and Camberwell has a very good primary school so we decided to purchase a property there,” Ms Xu said.

“I heard from my friends that the school is very good.

"Camberwell has both [Australian-born] and Chinese students, so for our children, who are born in a migrant family, they can be exposed to both cultures.”

Ms Xu said she has witnessed an increase in the number of Chinese students attending Balwyn High in the three years that she took her daughter to school.

“The students walking to the school look like they're from an Asian background and a lot of them speak Mandarin,” she said.

“The Chinese population in the area has also increased in the four years that we have been living here.”

Bureau of Statistics data shows the percentage of people living in Balwyn who were born in China increased from 4.9 per cent to 9.3 per cent during 2006 to 2011. Meanwhile, the percentage of Chinese migrants in Melbourne grew from 1.6 per cent to 2.4 per cent in the same period.

The director of Kay & Burton Hawthorn, Scott Patterson, said much of the growth was driven by these buyers wanting new homes.

Mr Patterson explained that many houses built around the 1950s in parts of Balwyn and North Balwyn are reaching their expiry date and are being bulldozed.

“A lot these 1950s houses were very modest and not adding a lot of value to the land, but now people are buying them, knocking them down and spending another million dollars building,” he said.

“The average price in the area instead of being around one million is now two million.”

He said that word had spread that Balwyn and Glen Waverley are desirable areas to live in.

“If it's in the Balwyn High School zone, it has a distinct advantage and normally it doesn't stay on the market for too long,” Mr Patterson said.

Senior economist at Australian Property Monitors, Dr Andrew Wilson, said suburbs in the City of Boroondara had experienced some of the most bullish growth in Melbourne this year.

“Balwyn North and Balwyn are very popular with the Chinese community and we've seen very strong prices growth in Balwyn North this year and continuing high clearance rates,” Dr Wilson said.